FedEx is fed up with being caught in the middle of the Trump ban on Huawei. And after a couple of Huawei's packages were misrouted to the US, the shipping giant is now suing the US Commerce Department.
The company is claiming that it has been "essentially deputized" to enforce the entity list that Huawei was placed on. FedEx said in a separate statement on Monday regarding the lawsuit, that the current export ban "places an unreasonable burden on FedEx to police the millions of shipments that transit our network every day."
The lawsuit is a pretty simple one. It asks the US District Court in the District of Columbia to stop the Commerce Department from enforcing this ban, or the Export Administration Regulations against FedEx. Which has been completely unfair to FedEx. The company also notes that it had to develop "a sophisticated proprietary risk-based compliance system" to adhere to the US export laws by screening for senders or recipients that are on the list of entities on the entity list.
To make a long story short, the Commerce Department is essentially asking FedEx to do their jobs for them. And FedEx has had enough of that. The shipping giant ships "millions" (which is probably an understatement, if we're being honest) every single day. And having to check each package to make sure that it is not a package going to or from an entity on that list, isn't something that FedEx should be needing to do. Especially when those packages don't originate or are headed to the US. Never mind the fact that they aren't even going through the US to get to their destination.
FedEx has been a big part of the Huawei Ban, whether they like it or not. After having a couple packages shipped from Huawei's office in Japan to their headquarters in Shenzhen, China, be diverted to the US, FedEx also refused to ship a Huawei P30 Pro from the UK to the US. PCMag reported last week that one of their writers in the UK was trying to ship the P30 Pro to one of their writers in the US, only to have FedEx return it to them. It refused to ship it, and we found out yesterday that the FedEx employee that came across the package had a "panic attack".
It's unfair to FedEx, as it hasn't done a single thing wrong in this ban on Huawei, yet it is getting a ton of the blame. Huawei has even said that it is reassessing its relationship with FedEx after these few instances where their packages were rerouted without their permission. The Chinese government is contemplating putting FedEx on its own Entity List. That would be a major blow to FedEx's business, considering almost all electronics are shipped from China to the US, and most of that is done through FedEx.
China is a big growth market for FedEx too, and being placed on the Entity List, would only make their already cut 2019 earnings, even worse.